This post has a temporary solution, but it mostly has to do with my experience and troubleshooting. I'll keep an eye on this thread in hopes that someone can come up with a permanent solution.
My wife got the LG HBS-700 last week and used it on her OG Droid and my Thunderbolt and it sounded great on both. A few days later, she got the RAZR and has had the same issue as the thread starter. We just went to the store where we bought both items (non-Verizon store) and bought another headset just to test it. This time it was the Motorola S-10 HD.
The S-10 sounded just fine, but not as good as the HBS-700 on the other phones. We have also tested wired headsets and they sound great.
I then decided to read the HBS-700 manual and found that it has equalizer options by pressing the volume up and volume down buttons simultaneously. After three or four presses, it finally makes a difference and it's louder and has more bass. I could almost say it sounds great! I tested this on the dialer, Pandora, Slacker, and YouTube.
I played a video on YouTube, but it wasn't HD, so it didn't sound very good. It did sound better than before I had discovered the equalizer. I then tested Pandora and had to switch the equalizer for the first song. I skipped the song after 2 minutes and the audio automatically went back to the tinny, low quality sound. I tried a few other songs and I had to reset the equalizer on each song. I did not let if go from one song to the next on its own; I skipped each time I tried another song.
I then went to Slacker and had to reset the equalizer for the first song. I skipped to another, then another, and I did not have to reset the equalizer during this time. Then I switched over to the dialer and I called my office and heard the business hours message and it sounded loud and clear. It sounded pretty bad before. I went back to Slacker and reset the equalizer once again, then I skipped a few songs without having to reset it.
Fiddling with the phone's equalizer didn't seem to have much effect. Now it's just a matter of finding a way for the phone and/or the headset to remember the ideal setting and keeping it rather than having to reset it every few minutes.